This paper examines the mediating effects of dynamic capabilities on the relationship between global knowledge management competences and competitive advantage. The predictions of dynamic capabilities were tested using a sample of international enterprises in Taiwan. The results indicate that dynamic capabilities are the key to competitive advantage. The performance of an organization can be considered as the outcome of a complex isomorphism and reciprocal influences between its internal and external competences and dynamic capabilities related to environmental uncertainty and turbulence. Structural equation analysis is applied to empirically testify the relationships and the path model suggests that dynamic capabilities of an organization play an important role on transforming global knowledge management competences toward competitive advantage. These results provide evidence of the dynamic capabilities view that the dynamic capabilities refer to the capacity of the firm to shift its boundaries in order not to be overwhelmed when the environment pressure becomes excessive.